I do know that you CAN sort by a first letter that starts with a diacritic if you wish. The issue is that it will typically fall at the end of the English alphabet, and many people won't look there. With the Polish alphabet the similar diacritic will line up after the letter. For instance (as I see in the Gazetteer): the Ł will come after L. On wikitree, the Ł will appear after Z, so we just incorporate those villages that start with the letter into the rest of the letter L.
We've been doing it by adding this text under the CIB: [[parentcategoryname|Lancut]] (vs. Łańcut.) With the parentsort option in the CIB it accomplishes the same thing (I admit I like it better because it cleans up the page in edit mode.) The things you learn! :)